How To Become A Landlord

There is money to be made in property and you may be wondering how to capitalise on this when interest rates are so low. One thing you can do is become a landlord but it can seem like a minefield on times.  So here is a simple guide to becoming a landlord.

Property


Are you buying a property for this purpose or do you have one already you will let?

If you are buying a new property to maximise potential, you could look at buying one in an area in demand, such as near colleges or universities or in a tourist destination. 

Type of Let

Are you going for a long-term or short-term let? You could potentially get more money for a short-term let but this could be seasonal. You have more flexibility with a short-term let which means you are not locked into a long-term agreement. A long-term let generally means you get a regular income coming in but the returns may be lower. 

Remember you can earn £7500 tax-free in the governments rent a room scheme.  If you are going down the Air BnB route you should be furnishing the property to a good standard, and provide free Wi-Fi, good quality bedding and towels as this is what is expected these days to get positive feedback.

Furnished or Unfurnished

Will you rent your property furnished or unfurnished? A furnished property can demand more money but you may get items damaged and you will have to factor in replacement costs long-term. 

Don't forget you have a responsibility to provide fixtures and fittings including furniture which is safe to use. Whether you are letting it furnished or not you need to provide smoke detectors, carbon monoxide alarms, fire extinguishers. fire blankets and gas and electricity safety certificates. 

Tenancy agreement




Make sure you have a tenancy agreement in place, which is a contract between you and the tenants. It sets out your responsibilities as a landlord and that of the tenants such as when they will pay their rent. 

Consult a solicitor to ensure you have the correct details. This is a legally binding contract. If you use an agency they will be able to provide a tenancy agreement for you.

Agencies

If you decide to use an agency to help you let a property you have advantages and disadvantages. 

The biggest advantage is that they can advertise the property for you and also deal with the tenant. The biggest disadvantage is that they take a fee, usually 10% but can be up to 20%. Some people prefer to use an agency as it can be a stress-free 'hands-off' approach to letting without the fuss.

Mortgage

A buy-to-let mortgage is the type of mortgage you need for a new property.

If you still have a mortgage on a current property it is important to inform your mortgage provider as you could get into trouble with them otherwise, as the mortgage was provided in the first place presuming you live there unless you said otherwise.

Insurances

So you have agreed on a let, then be sure to have the appropriate insurances. 

As well as building cover which is essential a landlord insurance policy is worth considering.  It can cover you for loss of rent if your home is damaged and is inhabitable, accidental or malicious damage by tenants, eviction of squatters and more. 

So here is a simple guide to becoming a landlord.  Let me know, have you ever thought about becoming a landlord

*Collaborative post

2 comments

  1. I thought about renting out my old flat when I moved in with my other half but the responsibility seemed huge for me plus I was worried about bad tennents!

    ReplyDelete
  2. I wish I had enough money to become a landlord, maybe one day.

    ReplyDelete